Zara Pos System Essay

1. How would you advise Salgado to proceed on the issue of upgrading Zara 's POS systems?

1. Should the company upgrade the POS terminals to a modern operating system?

Certainly the company should upgrade the POS terminals to a modern operating system if they want to keep up with the competition. On the other hand their vendor of operating system could end their cooperation, because ZARA stores are the only shops that still use the same old operating system. Therefore ZARA management needs to think in advance and minimize and remove any steps in the strategy that can make their business operations slower.

2. Should the company build in-store networks?

They should build in-store networks, and expand. This improves the overall shopping experience,

The competition sets their model on predicting the fashion trends in advance for entire year and they change their trends and do updating of shops twice a year. On the other hand Zara updates its trends twice a week, and does not stock their clothes. They do not rely on the small number of management in making decision on which clothes is going to be in store, which one will be on sales, or which one will be in process of manufacturing. Thus, they rely on the cooperation of the in store workers, designers and customers. Their logic is based on finding out what customers want to wear, and they follow those clues. They are not simply making the classic brand Zara. With this business model their intention is to keep customers thinking on new items that will be in stores. So they are constantly up to date on Zara’s fashion trends. They are in constant circulation through Zara’s shops. Design and production team consist normally of two designers and two product managers per specific collection, and they cooperate with store managers on a daily basis, depending on the geographical

What information does Zara need to operate its business model?

First they need to collect data on demands. What customers want to see in the stores, and what would they potentially buy. Then designers process this information and sketch what models need to be made. Then materials are bought on the basis of choosing the low cost ones. Cutting of models is monitored through computer system so that there is no over wasting of materials. When the fabric is prepared it is sent to the factories, from where when finished is sent to sewing shops for final details. The clothes is then labeled, and grouped based on orders and sent to different shop locations.

4. In your opinion, what are the most important aspects of Zara’s approach to information technology? Are these approaches applicable and appropriate anywhere? If not, where would they not work well?

My opinion is that they are satisfied with the usefulness of technology that they have been using so far, because they focus on mass production. Their main focus is what they need to manufacture, to find out what customers want and to make as harmful wrong predictions as possible. They are by the logic of producing a variety of products, and then the chance of making it wrong is reduced. They give more attention to that than to the development of technology. Their competitions rely on the technology while their make business plans and predictions one year in advance. Still Zara has been more profitable then the competitor,